Consumers believe that their outlook is getting better. But they are not necessarily ready to participate in the housing market just yet. The June Housing Survey released by Fannie Mae shows that consumer sentiment toward the housing market is continuing to improve as the overall economic outlook improves but it still sits well below the level necessary for the market to normalize.

“Since we began collecting monthly National Housing Survey data in June 2010, we’ve seen substantial progress in consumer home price expectations and other key attitudinal measures as the housing recovery gained its footing,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

“Still, we do not expect to see ‘normal’ levels of new residential construction, in the region of 1.6 million new housing units per year, before the end of 2016, our original projection. Such a feat would require a pace of growth in housing starts not seen in decades.”

The survey indicates that consumer’s twelve month home price change expectation remained positive but dipped slightly compared to previous months, coming in at 2.4 percent. Further, 55 percent of consumers expect mortgage rates to increase in the next year.

“The uptick this month in the share of consumers expecting mortgage rates to go up and the accompanying decline in home price expectations reflect the pause of activity in the housing market so far this year,” said Duncan. “Despite recent improvement, we now expect an annual decline in existing home sales due to weak volume in the first four months of the year associated with the rise in mortgage rates mid-last year and the current dearth of supply of lower-priced homes.

This doesn’t come as a big surprise considering the unemployment rate, interest rate increases and home prices climbing. The fact that so many people think that their personal situation will get worse in the next 12 months is a little unexpected but not a great shocker. For a more detailed look at this subject – please read the article below.

Nearly two-thirds of those surveyed believe the economy is on the wrong track. Twenty-two percent expect their personal finances to worsen during the next year, and only 45 percent expect home prices to increase within the next 12 months.

According to Doug Duncan, SVP and chief economist at Fannie Mae: “We continue to see caution as the defining feature of Americans’ attitudes toward the economy and their personal financial situation. In this environment, the housing recovery is likely to improve, but only at a gradual pace.”

Duncan continued: “Our November National Housing Survey results show a loss of momentum in expectations for home prices and personal finances. Also, the majority of consumers expecting higher mortgage rates implies a slowing of housing market momentum. As the economy continues to improve and household balance sheets for most Americans are slow to repair, we continue to see the transition to a full housing recovery as a slow process.”

This is a pretty complete overlook of the inventory shortage. The one major factor that was not touched on by this article is the lenders, for a lot of different reasons, are not putting many of their foreclosed homes on the market as fast as they used to and therefore there are less of these homes for sale. For a more detailed look at this subject – please read the article below.

Inventories of homes for sale have been slow to bounce back since the 2007–09 recession, despite steady price appreciation since January 2012.

Normally, higher prices reflect robust sales. But lately, prices have been rising even though sales remain stuck at relatively low levels. The National Association of Realtors reports that an annualized 4.5 million homes were sold in June 2013, roughly the same as at the end of the 1990s.

Many prospective buyers attribute the low sales volume to a lack of inventory on the market. So why are there so few homes for sale? There are lots of reasons why.

William Hedberg, a research associate, and John Krainer, a senior economist, both with the Federal Reserve Bank of San Francisco, examine some of the factors affecting this “more complicated than normal” situation in a recent paper. Here are their key findings:

Many homeowners are still underwater. Many properties are still worth less than the value of their mortgages, which would leave sellers owing additional money at closing.

As a result, a large number of homeowners are waiting for house prices to rise, allowing them to recover lost equity. They delay putting their homes up for sale until the situation improves and they can make back enough to cover the down payment on their next purchase.

How about the threat of another government shutdown looming, unemployment is still around 7.3%, the Affordable Care Act is not what was promised and scandals and lies are rampant in all phases of the government. This article just shows how far out of touch a lot of the academia really are. For a more detailed look at this subject – please read the article below.

The University of Michigan’s preliminary Index of Consumer Sentiment report shows a drop in confidence for November—and Capital Economics’ Amna Asaf is at a loss to explain why.

The index, released jointly by the University of Michigan and Thomson Reuters, fell from 73.2 to a two-year low of 72.0 in the first November report. With the economy in a relatively healthier position compared to last month, Asaf – an economist for the macroeconomics research firm—says the decline is something of a surprise.

“The further drop in the University of Michigan’s index of consumer confidence … is hard to explain given that the government reopened, the labor market is strengthening, equity markets have rallied and gasoline prices have fallen further,” she said.

The decline in November’s headline index came from a drop in the Current Conditions Index, which fell to a 10-month low of 87.2 from 89.9 at the end of October. That index typically reflects changes in job market conditions, which—given October’s strong increase in payrolls—makes the preliminary November figures all the more puzzling, Asaf said.

Meanwhile, the Index of Consumer Expectations, which reflects changes in equity and gas prices, registered 62.3, down slightly from 62.5. Gasoline prices are hovering at year-to-date lows, and mortgage rates have also leveled out at a five-month low of around 4.30 percent, Asaf noted.

If the CFPB has been getting complaints “For Decades” doesn’t it seem that they would have taken a look and possible reform years ago. Is this an indication of just how much the lobbers for the collection industry really influence the government? For a more detailed look at this subject – please read the article below.

Through an Advance Notice of Proposed Rulemaking (ANPR) issued Wednesday, the bureau is gathering information on a wide array of issues related to debt collection practices, including the accuracy of information used by debt collectors, how to ensure consumers know their rights, and the communication tactics collectors employ to recover debts.

“For decades, many consumers have reported various unacceptable practices in the debt collection industry. Today’s action will allow us to hear from the public as we consider what rules are needed,” said Richard Cordray, director of the CFPB. “We want to ensure that all players in the industry are working with correct information, that consumers are fully informed, and that consumers are treated fairly and with dignity.”

There are many players in the multi-billion dollar debt collection market, including banks, other original creditors, and third-party debt collectors hired to work on behalf of the original creditors. It is estimated that there are more than 4,500 debt collection firms in the United States.

The main law that governs the industry and protects consumers is the 1977 Fair Debt Collection Practices Act (FDCPA). In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act revised the FDCPA, making the bureau the first agency with the power to issue substantive rules under the statute.

This is probably an indication that the US population does not expect much from our elected officials and that is exactly what they are getting. Because of this they are not registering too much disappointment with them. For a more detailed look at this subject please read the article below.

Are Americans so accustomed to the ineffectiveness and triviality of Congress that the threat of a third week with essentially no governing body barely registers a blip on consumers’ confidence scale?

Even with a drop that put its preliminary October reading at a nine-month low, the University of Michigan’s Index of Consumer Sentiment was better than many analysts were expecting.

The index plunged to 75.2 in the mid-month report, down from 77.5 at the end of September. Economists surveyed by Reuters expected a preliminary value of 76.0.

Still, with the current situation in Washington, October’s numbers aren’t so bad, says Amna Asaf, economist for Capital Economics.

“Given the impact of the ongoing government shutdown on some other measures, the modest decline in the University of Michigan’s index of consumer confidence … was comforting,” Asaf said. “We suspect that a combination of lower interest rates and gasoline prices helped to offset some of the negative impact from the shutdown.”

The fall in the headline index was due entirely to a drop in consumer expectations. The Surveys of Consumers’ Index of Consumer Expectations fell to a 2013 low of 63.9 from September’s 67.8.

While the index’s value “is now consistent with a sharp slowdown in consumption growth in the fourth quarter,” Capital Economics doubts that will happen, noting “declines in sentiment don’t always translate into falls in actual spending.”

The short term effects might be minimal for a lot of people in the housing market but for our business we are shut down as HUD and the VA are not processing any Condo approvals. We are still compiling data and getting projects ready to submit but until HUD and the VA are back up and running we can’t send any packages in. This will be remembered in the 2014 elections for both parties. Please read the article below.

As the federal government ground to a halt Tuesday, the question of how the shutdown will affect the housing market remains at the front of everyone’s mind. How will the market react? The answer: it depends.

Mortgages will continue to proceed through the usual government channels, although some delays are expected.

More than 90 percent of the residential housing market depends on the government and/or the GSEs for underwriting, insurance, and funding. Mortgages controlled by Fannie Mae and Freddie Mac will not be affected because they are funded by fees from lenders rather than federal appropriations.

Some concern has been raised about how the employment verification process would proceed in the event of an IRS shutdown. Freddie Mac issued the following clarification to lenders Tuesday: “If a loan is made to a government employee and the closing date is during the shutdown period, you do not need to obtain employment verification or re-verification prior to closing if a government office providing the verification is not able to do so as a result of the temporary shutdown. You are also not required to obtain employment verification or re-verification for such loans after the shutdown ends. This exception does not apply to income verification or any other requirements…We only require IRS Form 4506-T to be signed by the borrower prior to closing. We do not require that 4506-T be processed by IRS prior to closing. However, we require that the actual 4506-T information is obtained as part of the Seller’s in-house QC program.”

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